It is “essential” that Lancashire County Council finds £103m of savings over the next two years in order to maintain sound finances, a report has warned.

The document – produced by the authority’s officers and presented to a cabinet meeting last month – sets out how much each department will be expected to cut from its budget, in what is described as a “challenging” programme.

The overall tally – which was baked into the budget set by the county council back in February – has been thrown into even sharper relief after figures were published showing how difficult it proved to achieve savings that were planned during the last financial year.

Only 48 percent of the authority’s £68.6m target for 2024/25 was delivered. The vast majority of that shortfall was accounted for by ‘adult services’, which provides social care to vulnerable individuals. It was aiming to save £34.8m – but managed just £3.8m.

That same service area now faces the biggest burden within the new savings target – with it being asked to cut £46.7m, 45 percent of all the spending reductions required across the entire county council through to 2026/27.

The failure to achieve savings in previous years – resulting in the need to roll them forward into an even larger future package of cuts – was heavily criticised in the run-up to May’s local elections by Reform UK, which went on to take control of the authority.

Almost half of the £103m target for the next two years is made up of past savings that were not delivered on time under the previous Conservative administration.

The Tories say they left the county council in a stable financial position and - against the backdrop of a usable ‘transitional reserve’ of more than £180m at the start of 2024/25 – rubbished claims made by Reform’s national leader, Nigel Farage, that Lancashire County Council had been taken to “the verge of bankruptcy”.

The now ruling Reform group has made balancing the books its top priority and used its first cabinet meeting to institute an “efficiency review” of the authority’s “financial management, procurement and associated governance arrangements”.

However, the party’s much higher profile – and more controversial – ‘DOGE’ unit is yet to arrive in Lancashire, the Local Democracy Reporting Service (LDRS) understands.

The team of self-styled savings seekers is yet to appear – in spite of an imminent ‘scoping meeting’ having been announced more than six weeks ago. Their forthcoming trip to County Hall was heralded by Nigel Farage when he visited on 12th June.

DOGE – modelled on the controversial Department for Government Efficiency, launched by Elon Musk under the Trump administration in the United States – was set to arrive sometime the following week.

As the LDRS revealed at the time, the initial visit was to discuss issues surrounding data protection, ahead of the group getting to work at a later date.

However, it is understood the unit – comprising software engineers, data analysts and forensic auditors – has not so far pitched up in Lancashire, pending data-sharing agreements being drawn up with other areas it has visited. The first of those was reached with West Northamptonshire Council late last month.

Opposition group leaders in Lancashire had raised concerns over the access those operating under the DOGE umbrella – appointed by Reform at a national level and providing their services for free – would be given to sensitive information.

While no date has yet been announced for the unit to come to Lancashire, the LDRS understands that the unit – now headed by former Reform UK chair Zia Yousuf – will still be visiting all 10 county councils the party now controls.

Lancashire County Council leader Stephen Atkinson has previously sought to demarcate and yet dovetail the internal efficiency review and the DOGE process.

He told the LDRS in June that DOGE was a way of seeking “advice and support from our national party…like any party would”, adding that it was necessary to “govern the council separately to that” and “find a route that respects the council’s constitution”.

“What we have got to do is take the best of DOGE and take the best of the council and bring them together so that we can deliver more money to frontline services – and that’s what this is all about in the end,” County Cllr Atkinson said.

WHERE WILL THE CUTS COME?

The nature of the individual savings that will have to be made to shave £103m off Lancashire County Council’s budget has so far gone largely unspecified beyond the walls of County Hall.

However, the expectations for how much will have to be cut by different directorates – collections of departments in the same service area – has been laid out (see below).

The recent report to cabinet members noted that the authority has “a strong track record of delivering savings over many years, with a robust governance process in place to support, challenge and ultimately ensure savings are delivered”.

The process for monitoring savings was further toughened last year. Each directorate has a ‘finance board’ which meets regularly, in addition to a council-wide ‘value for money board, which is chaired by an executive director.

Because of the significant savings demands being made of adult services – and the failure to achieve the target they were set in 2024/25 – a full review has been carried out of all that directorate’s spending reduction plans and “adjustments made where required”, the cabinet members was told.

Adult services “reduced costs and increased income wherever possible to mitigate the challenges faced in delivering savings” last year – and a delivery programme is in place for 2025/26 with “key milestones identified for each individual saving”.

This is how much each county council directorate is being expected to save in total across 2025/26 and 2026/27:

Adult services – £46.7m

Education and children’s services – £13.3m

Growth, Environment and Transport and Health – £22m

Resources – £7.7m

Council-wide services – £12.9m

Source: Lancashire County Council

SPENDING PRESSURE POINTS

Lancashire County Council overspent its budget by £10.6m during 2024/25 - 0.95 percent of the £1.2bn pot it had at its disposal.

However, the figure - which was driven down from earlier estimates that the authority would overshoot by £17m - masks significant overspends by some departments, which were partially offset by underspends in others.

Adult services exceeded its budget by the largest amount - £21.6m over the £469.8m limit set for the directorate.

A recent report presented to cabinet members noted that workforce costs had been “a consistent pressure”, with agency staff being used to continue to cover sickness absence, vacancies and “retention and recruitment issues”. Ongoing strike action by social care support staff over pay and working practices was also cited as contributing to the problem.

Further controls are planned on agency spending, in addition to those already in place, which are reported to have already reduced costs to a degree. Agency workers have been offered permanent contracts or exit dates.

Meanwhile, the service is also facing pressure as a result of the “complexity of…need” of those vulnerable adults it supports, as well as strain on the NHS, which is resulting in “more crisis type support” being required.

Helping more people continue to live independently at home is also identified as a cost that is “adding to financial pressures” - in spite of those efforts long having been championed as a way of saving money in the longer term. The situation is currently being exacerbated by an increase in the number of people needing 24-hour care, notwithstanding attempts to increase independence.

Elsewhere, children's social care overspent by £1.3m, largely as a result of increases in family support costs for youngsters with disabilities.

However, in contrast to the adult service, the children’s department has managed to reduce its use of agency and ‘managed service’ staff, cutting the bill by £1m.

Money allocated to residential and fostering placements - excluding those for children with disabilities - was underspent by £0.9m.

However, one of the biggest areas of overspend - continuing a trend set over recent years - saw £4.3m more than planned swallowed up by the cost of home-to-school transport, mainly for children with special educational needs and disabilities (SEND). The number of young people using the service rose by more than 15 percent during 2024/25.

Reviews of the routes taken by the vehicles delivering the service were undertaken in an attempt to make them more efficient - but the proportion of journeys involving just one child being taken to and from school by taxi increased. More personal transport grants were also given to parents to encourage them to make their own arrangements.

Other elements of the highways and transport budget which overspent include an unplanned £1m extra outlay on gritting and responding to storm damage. However, the poor weather that caused that excess spending also led to a £1.2m underspend on concessionary travel, because fewer journeys were made.

The resources and chief executive directorate saw the biggest overall underspend - of £12.9m - including savings made on insurance costs (£2.3m) and procurement (£1.1m).